Jack Ma, the Chinese billionaire who has maintained a low public profile ever since his outburst against the ruling Chinese communist party, is perhaps going a step further than being out of picture. He reportedly intends to divest his stake in Ant Group, which he founded eight years ago, and give up his control over the Alibaba affiliate.
According to a report by The Wall Street Journal, the business tycoon intends to give up his control over Ant Group, which means that he could transfer some of his voting power to other Ant officials. Currently, he controls around 50.52% of voting rights in Ant Group, even though he does not hold any executive titles or have a seat on its board.
Ma’s stake in Ant Group is currently at 10%, and he has secured the majority of voting rights in Ant Group through Hangzhou Yunbo Investment Consultancy Co, controlled by Ma, which owns two units that hold the voting rights. Ma has the highest stake in Hangzhou Yunbo – 34%.
This decision by Ma comes as the financial technology company is trying to distance itself from Alibaba Group Holding Ltd, following scrutiny and a crackdown by Chinese regulators on homegrown tech titans such as Alibaba and Tencent, apparently because they are now being seen as too big to control.
The crackdown on Chinese tech giants included the derailing of Any Group’s blockbuster IPO in 2020. At that time, the initial public offering was set to reach a humongous $37 billion, which would have smashed all records and gone down as the world’s biggest IPO at that time.
However, the IPO was stopped in its tracks before it even began as the Chinese regulators cracked down hard, and the government later forced it to become a financial holding company overseen by China’s central bank. With its IPO plans down the drain, Ant Group was forced to be subject to a restructure.
Later in April 2021, Ant was reportedly searching for ways for Ma to divest his stake in the Alibaba affiliate. The latest move by Ma is reportedly to “appease regulators following a lengthy crackdown,” according to Bloomberg. Should Ma successfully relinquish his control over Ant, it would push back plans of Ant’s IPO by a year at the very least.